HMRC has warned 5.4 million people they could face a fine if they are selling online. The warning from the government tax department, which is now operating under the Labour Party, is threatening £100 fines for people who sell on Etsy, Ebay and Vinted.
Alastair Douglas, CEO of TotallyMoney, issued a warning especially to people turning hobbies into hustle by selling online. The expert warned: “If you’re unsure if you need to file a tax return, it’s worth double checking, especially if you’ve been selling items on apps like Etsy, Ebay or Vinted, or if you’ve made money from investments, including rental properties, crypto and even tips or commission.”
Myrtle Lloyd, HMRC’s director general for customer services, said: “We know completing your tax return isn’t the most exciting item on your New Year to-do list, but it’s important to file and pay on time to avoid penalties or being charged interest. The quickest and easiest way to complete your tax return and pay any tax owed is to use HMRC’s online services – go to GOV.UK and search ‘Self Assessment’ to get started now.”
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You normally need to file a self-assessment tax return if you’re self-employed and your income hasn’t had tax automatically deducted, or if you’ve earned extra cash outside of your normal employment that has not been taxed.
- Your self-employment income was more than £1,000 (before taking off anything you can claim tax relief on)
- Your income from renting out property was more than £2,500 (you’ll need to contact HMRC if it was between £1,000 and £2,500)
- You earned more than £2,500 in untaxed income, for example from tips or commission
- Your income from savings or investments was £10,000 or more before tax
- You need to pay Capital Gains Tax on profits from selling things like shares or a second home
- You’re a director of a company (unless it was a non-profit organisation, such as a charity)
- You, or your partner’s, income was over £50,000 and you’re claiming Child Benefit
- You have income from abroad that you need to pay tax on, or you live abroad but have an income in the UK
- Your taxable income was over £100,000
- If you earn over £50,000 in the 2021/22 tax year and make pension contributions you might have to complete an assessment to claim back the extra tax relief you’re owed
- You’re a trustee of a trust or registered pension scheme
- Your State Pension was your only source of income and was more than your personal allowance
- You received a P800 from HMRC saying you didn’t pay enough tax last year